tv Squawk Box Europe CNBC October 30, 2015 4:00am-5:01am EDT
it's been a very strong performance across the board if you take a look at the german stock market it's been the best performance so far for the month since april 2009. it was recovering trade in october around the global growth story derived from china in particular. the market saw a reason to buy back into stocks. the ecb standing ready to do more. we still didn't get the rate hike from the fed.
as we look to close out the month we're starting out in a positive tone. on the stoxx europe 600. a bunch of you have been reporting more out this morning. let's just chase a little bit of reaction to boj in the mix as well with the admission that they're not going to get to that 2% target any time soon kicking that out further down the path. the basic resources trade, we're down .4% now. the biggest glencore in the bunch. health care also down .2%. that's pretty much it. the rest of the trade just as i say that we're warming up more into the session and a couple more sectors turning negative. travel asia. also this morning, down just a fraction. dow chemicals positive so far. construction up about .3%. obviously food and drink, ab inbev up. but the stronger ones, total,
top of the basket for oil and gas trading up about .5%. a lot out from the sector this week. autos building. up 3.5%. very strong performance from the french autos. we're up about .7% in that sector. individual indices, let's take a quick look at how we're shaping up here. the ftse is on track for the worst week we've seen so far since about september i believe it is. we have the ftse .2% firmer. the cac .4 higher. 10,843 so far. quarter of a percent south so far. well, far from plain set of earnings from airbus which is hiking jet production by a massive 20% after beating the street in the third quarter now aims to make 60 planes a month
in 2019 up from its previous target of 50 a month and also in the space but from the other side of the coin the british airways owned aig upgraded it's profit guidance following better than expected results. a 59% jump on qe sales on the back of the impact of the cheap oil price. sliding 4.3%. in the banking sector, one of the headline acts today. bnp riding 14.5%. you're seeing the pop today. let's get out for more in paris. >> investors like what they see today. the net income and revenue improving above forecast for the second straight quarter now. we spoke to the cfo just yesterday about the results and he also commented on the capital position as well. the bank did manage to increase with it's capital core tier one
ratio. however this still trails the european rivals and their peers when we see the european banks trying to get up ahead of the requirements from the regulators because we don't know what the frame work will look like going forward. i did ask whether the bank was pushing it up even further. here's what he had to say. >> there might be a trend. you see banks gravitating to 11%. for us today, the regulation hasn't clarified where we have to be. for us the most important thing is agility and that's what i think is over and over again. we are diversified so we basically normally 100 basis points in earnings every year. of course we're mark 45% of that in dividend so this 55 basis points that we put out on a daily basis and it's that agility that puts it in confidence that once things will
be clarified with the euro zone is going we'll be able to adapt. >> but are you reviewing potential options to boost that capital ratio? non-core assets? >> we are generating capital increase. 40 basis points in the first nine months so for us that gives us the agility. we do have a strong balance sheet. we have dispose of some assets. but i remind you that we deleveraged strongly in 2012. we're one of the first banks to deleverage. we have shrunk our balance sheet and it allowed us to make the plan which we're unfolding. as you can see it's already delivering the 9.6%. >> you mention that you're still waiting to see how the euro zone recovery progresses. last quarter you mention that you saw it in the economy. looking into your domestic market specifically are you still confident or do you think
more can be done in ecb easing. >> in our vision through end of last year, euro zone growth was suffocated by all the regulation. it is true that the monetary policy or the things done like the quantitative easing have basically stepped on the gas and lead to what we see. this is what we see. it's progressive. we're still having deposits out basing loans but we're in positive loan territory so it's more than a glimmer of hope. it starts to be smart but it's progressive. it's true if you look at our growth in europe at the levels we observe in our u.s. activities but for the moment, it's progressive. >> does that suggest you would welcome an expansion or extension of the current stimulus program for the ecb? >> the monetary policy has been what is happening. let the ecb review their jobs. they're reviewing and looking at the numbers.
there's strong numbers coming out. we'll have to see. it's still both the regulatory pressure requires some counter balancing from the monetary policy to ensure this glimmer of sparkle growth becomes full flegded growth. it wasn't all perfect. they did dip slightly and that's from the low interest rate environment so the bank is preparing for the lower rate environment for a little bit longer here but when we look at the corporate banking stage, that unit performance was strong as well and particularly when you look at the fixed income trading that so many banks have been under pressure from came in flat. good performance there and for the equities trading as well. >> thank you. the companies i'm looking at are not getting the reaction you're seeing there. we have negative numbers here. breaking bad for rbs.
they warned expected future litigation and misconduct related costs to be substantially higher than previously expected. that comes after the bank swung back to an operating loss in the third quarter due to restructuring charges. keep in mind it has been trading south. so it's been a negative performance year to date of around 20%. elsewhere, impairment charges also reigning down on spain's company bbva. the second largest bank there posted a third quarter loss due to a write down on a turkish banking investment. on a brighter note, spain's spanish bank had a year on year bump up in the income. worth noting though, 5.6% down from 6.1% at the end of june. so about a 50 basis point improvement but the improvements are starting to slow. the share price under pressure today. so too is one of its rivals in spain. if i can take you, an
improvement of 12 basis points. so you are seeing just very slim numbers on this metric. now up about .6%. it's suffering from a lack of profitability due to its bad loans. the lender posted an 8% drop in nine month net profit. so that's a round up of the earnings reaction so far steve. >> thank you. come back and join us. we have william hobbs joining us. and of course our guest host who is the global head of trading strategy at city. before the break he was talking about the violence that could be in the markets as we switch from our obsession with deflation to particularly whatever it may well be comes back into the market. we could see some violent reaction market. do you agree? >> yeah. we've been a bit too early on this. so we thought sometime agatha likely the next phase of volatility, a more durable pick up would actually come from
inflation picking up a little bit as wages came through and so on. that's still probably the case. it's just being delayed but not cancelled all together and i think as we go into the end of the year what you may see the next couple of quarters is the effects of commodity prices start to wash through the inflation data and you could reach that point where a lot of the labor markets -- we may be there in the u.k. but the u.s. we're getting closer. >> does violence on the upside have the same effect as on the down side? i would say no. people get more panicy on the down side and on the upside everybody gets excited about it. >> did i use violence? >> i'm pretty sure you used the word violent. i may be wrong. >> i think when we think of squeezes we think of short squeezes. i think volkswagen in 2008.
>> a bit of their own medicine. they didn't like it, did they? >> no but the underweight positioning in oil and minors in particular is sizable. so there's a yield. and what tends to happen on the way up is it can snowball pretty quickly. the more they go up the more you're hurting. the more you're hurting the more they have to bring them back. price momentum is how you gauge consensus positioning. this was taking down these positions because they started not working. >> what a month we've had. i didn't realize it's some of the best monthly performances.
since 2011 i was thinking about the violence earlier in the month in september. so the sustainability of that move to the upside is questionable once the momentum starts if we do see trade. >> a lot depends on what happens next in the u.s. economy. a lot now rests on the shoulders of the u.s. consumer. what you have seen is the down trend and you don't get the backing passed on to wages that makes the recovery look more fragile. i guess if what we have seen is just normal volatility in an up cycle and you find a pick up again in wages, you'll find your recovery is more sustainable and probably prospects for corporate profitability look all right going forward. >> then we'll start worrying about how many rate hikes we're going to have in the united states because we have got very
complacent worrying about one hike. but that's immaterial compared to what the cycle would look like in the latter half of 2016 if we get this recovery you're talking about and i'm wondering if the market and the world is ready for a series of sustained rate hikes. >> it would be cost dependent. it's a good problem. if you do rate hikes because there more wealth we addressed the bigger worry in the market. the speed at which it goes up needs to be slow enough so the market can react to it and the positions can be adjusted and as it stands we have not seen that as a sizable risk. volatility going up because credit is going wider is another thing. it tends to highly core late and we would expect more volatility in this market. but not necessarily coming from the rate hikes or at least it's more about the credit side of the market to some extent there.
>> they like you to go very slowly. they like you to be very tolerant. the thing you could see which would be interesting is the bond market goes back to setting interest rate and the fed goes back to rubber stamping moves approved by the rest of the curve. >> glad you mention the bond market. that's the next side of this as well. we have the lack of inventory, and lack of liquidity. and we get reinflation trade. that could mean more tantrums. plus add to that another layer of the conversation earlier on with our oil guest about nocs and sovereigns from those countries with drawing from treasuri treasuries. it makes an interesting cocktail in 2016. >> i'm an equity guy. so i push equities. >> i know that. i get this from the fixed income -- the credit guys.
the credit guy said i can't look at equities. you have to price your credit off of equity. that's how you work around it. they get annoyed at me. so go on. i'm asking you an equity guy about fixed income. i've done it. >> you would have to be pretty bearish and pretty deflationary based to think they can compete we inquirity returns. so we're not cheap but we're relatively cheap and we think there's more upside in equities. >> what happens to fixed income? come on. >> i've been caught so many times wrong calling the great rotation. i'm not sure i'm going to get that just yet but do we think in new flows are more likely to become equities, yes. >> you can talk about fixed income gas opposed to fixed
income guys that won't talk about equities. >> boring stocks with big dividends, stocks that grow regardless of economic growth, all of that, if you do get worse growth from here then you could find further small gains in that sector but the reality is the best of your days is behind you on those ones and you have to look to the ones he has been talking about. some of the more cyclical names and well priced trades. >> actually showing up on markets today as we close out the month of october some of the big performers are the resource names and the more beaten up stoc stocks. seen a real transformation. rolls royce, that's where some of the stocks are being brought up today. so it is take place in this trading session. speaking of resources, let me just take you to bg group because this is how the reaction
has been to its numbers that have been posted today. the latest is that we have a 2nd rise in production guidance this year from bg, the british energy company saying it has benefitted from improved performances in it's operations in brazil and australia. however the company did report a 37% drop from a year ago due to weaker oil prices. it's also pledged to meaningfully lower capex next year. well a bit of frothe from ab inbev on its sales. thanks to consumer enthusiasm for premium lagers. overall a slight miss on third quarter core profits. still ticking above the 1% move. loreal 10% jump in third quarter sales. failing to conceal the miss on the higher expectations.
pointing to weakness in luxury sales in hong kong and also at airports. the ceo said he had good reason to believe this is just a temporary slow down. so the stock as you can see shedding 3.5%. >> let's get back to the gentlemen as well. okay so we decided that potentially could be reinflation trade. could be violence. but in terms of the cyclical stocks that could have an interesting move. we touched upon it but i want us to revisit the sectors and extreme positioning in pharma versus oil. you think again that there could be some extreme rotation between some of these cyclical and more defensively bias stocks. >> it would be fulfilling. you need to add fuel to a fire to make it grow. if the data is confirming that
there may be a bit more growth involved and the slow down we saw is only temporary and so on, yeah. it should create a rotation. then how fastly that happens will be very much a function of the price action. if it starts going up too much then it will be self-fulfilling. when these numbers come out and we talk about that earlier, the first move ended up being anticipated because everybody goes through one door and the door is just too small. >> just explain to our viewers again what you're saying, three standard deviations now on a bit of news compared, three times as many standard deviation moves. that basically equals extreme volatility, yeah. >> yeah. we have gone from 5% of the s&p having this move to 3%.
it's just three times the normal rate. >> yes. >> you are adding three standard deviations. >> yeah, probably. >> something that looks weird about the s&p and broadly constructive on the world. we think there's the slow down seen at the moment and maybe just the normal breathing of the economy by what's happening in oil prices. there's a number of explanations for it but we want to see the people talking about it. and able to come in and stop the problems that you see.
>> in order to justify where it is in the markets. there's a disparity between eps crisis and in the market as well. didn't have a great september. >> it's always going to be attractive. >> you'd be doing a lot on the bull market pre '87 as well. just tell us what we can learn from going back that far. >> you have to be careful. a lot of our industry, because we have so many to fill, we use history quite liberally and you have to be careful how you mind history. but it's quite interesting, black monday and at that moment
it exhumed. and then as with now -- >> some of them are still around. >> some of them are still around. >> the same banking there. >> yeah. well. >> well, he still gets it. >> yeah what you found then as with now you had a cycle long in the tooth so that gave the economists a bit more clout i guess but then, you know, what you found is the cycle wasn't over. main street barely even noticed the stock market gymnastics. life went on and the cycle went on a bit and the other thing i think is interesting to point out and this is something we come across with clients a lot. there's an idea that the vigor or length of an economic upswing defines or has some role in how big your downturn should be. that's just not really -- there's no idea. >> you guys just said to me in the previous conversations about the market could have an
interesting move to the upside on the reinflation trade as well. is that dented by the fact that we have had a very big upswing in equity markets? we have been around close to or at record levels for a long while now. are valuations at extreme levels? >> we're always going through new heights every year or -- if you look at the charts of when we reached -- >> i don't know, new highs in the s&p last year. >> but if you look at the since 1900 to the present day how many times in total return turns you're going through to all time highs it's a fairly regular thing. it's not something that should be unusual. in terms of valuation there's a big debate for us. i don't think that 17 times for the s&p looks extreme. we thought that three years ago. even with a normalized bond yield. a 4% premium and 4% bond yield, you can easily get to a 17 times. >> karen has a look.
it's on a roll but shares are take flight. >> that's right as we talk about this infrastructure/transport company. a 79% jump in net profit for the first nine months. the owner of heathrow benefitting but investors not buying into the performance. share price tanking 3.7%. elsewhere, the french aerospace and defense group safran is looking to sell it's security unit. this according to reuters. the company has been reviewing potential buyer with goldman sachs although no decision is made. they required 1% of the unit in 2009. this say very interesting deal because there's been so many financial deals taking place now so deals that had merits only a few years ago are now being sold off as businesses are shrinking and adjusting to the new normal out there with challenging mack kro econom
-- macroeconomic decisions out there. europe's largest is in talks to buy frhi hotels and resorts for around $3 billion. the shares drifting south but has enjoyed the rally in october as have other countries globally as you can see with the share price increase. meantime, investors are dialing into telecom italia shares after he increased his share from 15%. it has been seen as a takeover target. >> let's get to william hobbs. will doesn't think the s&p is expensive. it's down right cheap at 17%. >> that might be stretching it. >> do you find the valuations too extreme at 17 times. >> no, they're fair. they're fair. >> why are they fair with 14 or
15 -- >> well if you look at the range they are deleveled especially if you see it adjusted. if you look at other measures like price or yield equities are cheap. dividend yield versus bond yield. >> why are they trading up? >> on the year aspect it's part of qe, it's distorting it but as long as the distortion is there, there is an opportunity. so i can't claim they're cheap. and by the way, i'm feeding off research when i say that. but we found the market to be fairly priced and they are still a yield story and part of the market expensive for sure. >> it's the problem you have also, a lot of the industry, this whole history idea. we look very dogmatically at ten year rolling averages. that has to fall out from probably the greatest recession in our working lifetimes and the largest profits the market has ever seen.
what's your appropriate benchmark for history? do you go back 20 years? 30 years? >> your argument is jump in. >> if it's after the crash in 2008 it's absolutely spot on. ten seconds, yield, are you worried about chasing yield? >> yes i would be but my worries about yield are more about the idea that bond yields, yields on safer asset classes go up and that reduces the attraction. stocks will be very popular throughout much of this crisis. >> lovely to see you. william hobbs head of investment strategy at barclays. in the last half an hour of the show. but coming up on the show, the u.s. senate approves the governments two year budget plan passing the last major hurdle as they prepare to ink the bill into law. we'll cross out to washington for the latest coming up next.
>> investors checking out stocks. both in the red despite beating on results. the british airways parent also improving an interim dividend. banking on a rebound. posting a third quarter beat after a reassuring investment banking performance. different story at rbs which warns future misconduct costs could be a lot higher than
expected and the u.s. senate approves a landmark bipartisan budget deal averting debt limit clashes for the next two years at least. >> we're now half an hour into the trading session. we have been having a conversation this morning about some of the names and if there's any hint of a reinflation trade you could see a swing back into the games. a bit higher in session earlier on this morning. it has been a solid performance for those that have been long only equity names in october. it's been a recovery trade after all the mack kro concerns caused a stock market wobble in august and september. the liquidity across the chinese
market not helping as well. but so far it's been solid. the gains continue today. a little weak in the trading day. firmer by a quarter of 1%. this is how it looks. auto this morning. racing ahead by one plus percent. it's performing strongly to the down side. oil and gas still trading weaker today. the individual stock names a lot of earnings reaction. interesting names this morning. you may recall this company. we haven't spoken about it for awhile but it was in the thick of it with the russian story. investors trading very cautiously around this company. so it's warming more to the stock price today on the back of good news and it's reported a surprise rise in the quarterly profits. this was down to north america and helped compensate for the weakness in the recession and it's still it's key market still
challenges with operating profit but the numbers today giving light at the end of the tunnel for investors. on the back of the q-3 numbers it's revenue higher. that's a response in the share price. there was this hope around those big a-380. we heard saying we may finally see them reach the long promised break even rate this year. but unfortunately it may not last long. so next year as it reaches that level it may build up slightly less but by 2017 the situation gets fuzzy again. so investors relying on the airport. most of us spend our time on the single part of the aircraft. this is where they're still getting a lot of the gains. to the downside there have been some negative reactions.
bbva, traveling down by 3% on its numbers. hong kong and the luxury market still a challenge which has a lot of sales to that region on 3.3%. we mentioned the transport compani companies. it's down 4.6%. just a quick reaction from the numbers from one of the brokers saying the numbers today were consistent with current consensus so might disappoint short-terms. iag is outperforming it's peers and has maintained a buy rating on the stock. >> a landmark bipartisan bill that extends government borrowing until march 2017. it moves to president obama before a november 3rd deadline. tra tracie potts has the latest. i love the line from ted cruz.
he already had that, didn't he? with the levels of the u.s. national debt and budget as it is at the moment? >> yeah and part of the problem that cruz and other republicans have is they just feel that this keeps expanding and that there's really nothing holding us back from spending more money and borrowing more money and that it's a bad combination for our economy. cruz came back off the campaign trail. he actually cancelled some campaign events to come back here for this vote and so did marco rubio. he was back and by the way he has been criticized for missing 18 out of 19 votes during this month but this just happened actually about an hour and a half ago. so our lawmakers working overtime. the senate passed it. the house already passed it on wednesday so this heads to president obama's desk. the budget and the debt crisis for the most part will be behind us until after this election. this budget will ease the $80 billion in spending caps and
sequester cuts from a few years ago. it doesn't mean though steve that everything is over. there's still a series of appropriation bills that have to pass before the end of this year. this is the big overarching picture but they have to go department by department to pass those bills if it was within that budget. >> thank you. been on the u.s. debt clock and $18,000,000,000,4 18 trillion 425 billion. and moving very quickly. >> yes. >> but what is another $8 billion between friends. old friends on capitol hill. >> let's push on to another subject close to our heart. the london eye lighting up in the colors of the australian new zealand rugby teams. >> new zealand have been clear favorites but can they use their break down to out maneuver the
all blacks? could the economic match up give us a hint of how the final will be settled? these are very similar economies in many ways. we'll have you down and very similar economies. >> growth numbers first up we have got the aussies, 0.9% in the first quarter. truly strong relative to its peers. the second quarter growth of 0.2% but on the whole, still very strong. a solid 2% for the year. >> yes. solid. we have a descent growth rate as well. 2.4%. i have to kick it. there you go. never misses. 2.4% year on year. it has slowed down a bit and as such, the central banker has been cutting rates. didn't cut them this week. cut three times in a row. now down to 2.75%.
they are concerned of course that we talked about some of the sectors but agricultural and soft as you mention there. real concerned about the volatility and what's happening in that sector. >> i just kicked my heel as i was running back. i hope that's not symbolic of how the aussies are going to go on the field. it might have been a trying conversion for new zealand but let's talk credit ratings. if you take a look at australia, aaa, this is the principle of global credit worthiness. it's based on the high chick resilience in recent years, very high government financial strength and of course a low susceptibility to risk. i don't see why australia has a
credit rating in many ways to new zealand. it's the same factors hitting both as well. they control around 48% of the global dairy market and had a downgrade on its credit but the fact of the matter is the prices have been aggressive but no more so than the key commodities in the australian market. if you look at the domestic story as john was saying to us earlier on. he was saying look, look at the housing market just as hot. >> but tnot going to cut the aussies any slack on the field. australia is shielded from the outside forces and why that still holds despite countries losing it these days. let's go to central bank watch. if you look at what we have done on the interest rate story you
can't accuse the central bank of sitting on the sidelines and eating oranges while this is taking place. they have been very active. cut from 4.75% in 2011. it's come down about 3% on the cash rate leading 2%. a lot of action being done. we may get another tweaking but the central bank has done lite of the work already. >> eating oranges on the sidelines. they come on at halftime actually. you don't go into it anyway. 2.75% interest rate. i mention that briefly. go on. there we go. >> 3 for 3. >> 3 for 3. we'll probably be cut one more time before the end of the year. just a little bit of a wait and see. how fantastic it has come about to china as well. the policy can only benefit. huge agricultural community that new zealand has got plus the
fact, they have their trade deal. the transpacific partnership as well. didn't get the concessions they wanted but billions of dollars worth of benefits to come over a 15 year period as well. new zealand is going to benefit from that. >> a very interesting discussion point because these are two currencies that go head to head all the time. the kiwis has always been a contention. it's a different point of view on how they view the currencies. there's a currency war that goes on. very opposite for those that want strong currencies because they see it as a sign of national pride. so the fact that both have been marching lower is not really welcome for such international travellers and those that have come over this way in particular to watch the rugby world cup are seeing prices much, much higher than traditionally. >> true. >> just a brief burden on the currency. >> these days it's noting hill. >> they are doing well then aren't they?
but new zealand has been under a lot of pressure. that was one factor benefitting. but last month or so it's been a really stellar out performance. rates held relatively higher. but a carry trade on an interest rate, 2.75% is still incredibly low. >> and there in lies the point. >> earlier in the show we spoke with the prime minister of new zealand. we started off by asking him about his stocks on the transpacific partnership. >> new zealand negotiated with china and we thought they were $115 million reduction and a billion dollars of tpp. 259,000,003 billion. so it's about 2.5 times the size. we didn't get as much as we wanted but we didn't have to give away as much on property and still the largest
beneficiary of tariff production. still a very important deal. >> when push came to shove did japanese and the americans still wanted protections more broadly. that's really disappointing. >> negotiating at a time where canada was having the election. they came from a very controlled space. but half of the lobby one expansion liberalization because they're corporate farmers and doing well and they can see that they can compete and succeed and the other half are small farmers worried about their business and it's their own domestic lobby but i mean from new zealand's point of view, we 3% of oil production and to give you some idea it's mainly because of china. asia is growing rapidly. the issue isn't we're going to put you out of business.
do you have enough supply from asia. >> politicians to politics. turkey is holding it's second parliamentary elections this weekend. head out why analysts will fail to resolve the political deadlock that's tripled the economy. >> coming up on the show, stay tuned to find out the costumes that earning big bucks in the run up to the halloween weekend.
unconventional costume in particular. donald trump masks. some mexicans choosing to dress up as the republican presidential candidate perhaps to express their disapproval of his controversial comments on immigration. meanwhile retailers across the world are counting on halloween f festivities to boost sales. american consumers will spend $6.9 billion on halloween costumes and parties in 2015. here's the ceo of the company. good morning. >> good morning. >> i have a lot of american friends and all of them buy costumes for their kids and hosting halloween parties. tell us about how this halloween is shaping up for you. >> very well. it's the first saturday halloween since 1998 which means there's more opportunities for parties so should be a year of
good growth. we're also seeing halloween get bigger and bigger outside of america as we pick up the american culture. >> what's your best seller? what's your best margin product? >> best seller is probably the license ones. our best margin ones are our own designs. >> what do you do for the rest of the year because this is one event? >> particularly outside of america there's a costume market year round. whether that's for sports events, parties, role play. we're seeing the phenomenon with the success of marvel and the other comic book movies that are out. people are getting more and more into that and dressing up year round. >> i think my producers for instance have lost their collective heads. can you stand up? stand up all of you please.
we have a lot of them wearing -- what is that one on the right. is that one of yours? >> the red orc. >> how have i lasted 45 years without having the red orc outfit. >> i can only imagine. >> what's that? >> killer clown. >> again. extraordinary. >> and who are you? >> it's created by some horror forums in the u.s. >> my children will be dressing up. i think probably a bit boring really. >> we have a range for them. why are adults dressing up? >> i think people just want to have more fun and it's a good excuse for a party. >> what did you last dress up as. >> i've got one for tomorrow. >> for yourself or the children. >> for myself and the children.
i can't talk about it. it's a surprise. >> so you are fully paid up member of the lunacy club dressing up. >> i'm playing with my kids. >> you make me sound so boring now. >> it's big business and big money. >> we're known for the best spandex. it's expanded. >> there's a lot of cheap players. you can go to your local store and they've all got halloween ranges. so you got very low end and what you're talking about is slightly more premium. how slplit is the costume industry. >> it's consolidated quickly. if you look at the u.s., these big chains of over 1,000 stores
such as party city and over here because of such an advanced e-commerce market it's consolidating quickly around that. >> tell us something we don't know about the costume industry. this is not a natural spot for us. >> i don't know. there's just incredible diversity. >> social media now is a big growth driver. >> that's one of the key drivers of our business. >> dress up, take a picture of themselves. people want to share their experience and showing they're having more fun. >> it's often a very topical one. walter white was one of the biggest that year. the year before that miley cyrus. >> very tricky for middle aged men to dress up as miley cyrus. >> it is. >> there are costumes that can make that happen. >> and i presume they have a
large wrecking ball as well. was that part of the outfit. >> that was it, yeah. >> what you highlight is the attempts by the brits to have a go. i wonder if this is a natural market for you more so than other european countries where you don't see as much dressing up. you would be surprised at other markets. german carve value is probably the second biggest after halloween. >> if you you could dress karen what would you suggest she wore? >> well, we have the scary clown in a women's version so with a bit of face paint or the opening credits of james bond, the day of the dead. >> is it 20,000 extras or something all made up. have you seen the film? >> not yet. >> stunning. and for myself.
>> spider man. very super hero. >> he's very witty. i like a bit of peter parker. >> yeah. i could do that. >> climbing, building, scaling other structures. >> do you want to tell us what you're going to be dressing tomorrow night. >> no, i said it's a surprise. >> all right. excellent. well it's a great business. thank you for joining us. very exciting to see how it moves forward. thank you for making my production team look like absolute lunatics. that's the director. i know that. >> i don't think it was a 15-year-old kid from northern ireland. have they found some more now. >> the latest is that police have arrested a second teenage boy in connection with the investigation to that data theft story. keep in mind one 15-year-old boy we saw a spike in the stock price. today still peeling higher. .8%. so the cyber crime unit
detectors executed a search warrant at an address in belgium. a 16-year-old boy is in on suspicion of computer misuse. he is being released on bail waiting confirmation of that date. >> let's get to one more thing which is actually the dyg theme. dividend we're slightly concerned about the longevity of dividend. you have this dyg theme and i like it. explain what it is. >> so the goal is to say where yields are getting tighter and tighter on the bond side, all are dividend yield and you're starting to get two way risk on the bond side and we've seen it yet again where it's moving arou around. if you break this correlation with bonds what you need to add
is that and in order to do that in a safe fashion you look at dividend yield growth. >> absolute yield so we don't look at a 5 or 6% yield. we look at the yield growth. >> what you're doing is look at high yield. take it up to make it safe and look at the yield which is growing and this. >> where can we find the best dividend yield growth. the best dyg? >> probably get it in some of the domestic cyclicals in europe. you'll find some cyclical companies which are low leverage. which can't afford to pay dividend and grow it. you can still solve for 4.5. >> what are you dressing up as tomorrow night. grim reaper?
seems a bit of a grim reaper. >> or green and gold versus black. >> back to rugby. thank you for joining us. lovely to see you. the global head of equity trading strategy at city. >> just to put on the record, you are going for the aussies aren't you? >> i like the aussies on this side. i have great sympathy for both sides. >> on the fence. have a great day. have a great weekend. up next, worldwide exchange. oh, look. we have a bunch of...
announcer: babies who are talked to from the time they're born are more likely to have a successful future. talking and reading to children in their first years has a huge impact on what they do with the rest of their lives. the fewer words they hear, the greater their chances of dropping out of school and getting into trouble. talk. read. sing. your words have the power to shape their world. learn more at first5california.com/parents
>> good friday to you. welcome to worldwide exchange. >> here are your headlines from around the world. >> let's check in on the markets because halloween fails to spook stock with the u.s. markets set to boost the best month in four years and erase all of their losses. >> a big beat for bnp. they top third quarter exp expectatio expectations. >> starbucks wakes up and smells the coffee as shares sink in after hours on light frt